By Emmanuel Elebeke
A group of Civil Society Organizations, CSOs have warned Federal government not to go ahead with the proposed increase in the Value Added Tax, VAT, saying that such action would exacerbate poverty and increase inequality in the land.
The group which is operating under the auspices of The Tax Justice and Governance Platform, (TJGP) said it had followed the trend around the Federal Government’s effort to improve revenue mobilization to fund development in Nigeria with diverse views from different interest parties on which measures will be more strategic and sustainable.
Recall that the minister of finance had announced an increase in the VAT rate at the last Federal executive council held on the 11th of September 2019 after several denials of the possibility of an increase in VAT in Nigeria.
The group is a joint statement signed by Christian Aid Action Aid Nigeria, Centre for Democracy and Development Civil Society Legislative Advocacy Centre, OXFAM Nigeria, Imo state Tax Justice and Governance Platform called on the federal government to pay serious attention to widening the tax net rather than increasing the rate which will only place more burden on the few that complies already and still exempt the majority that do not pay taxes.
It also called on the Federal government to improve market information and transparency by implementing the National Tax Policy, promoting the commitment to progressive taxation and taking measures to improve financial transparency while cooperating with regional and international bodies to address the issues of illicit financial flows.
‘‘We welcome the VAIDS is an opportunity to increase the tax net, though it has not yielded the optimum result expected. We want to state our position for advocacy and campaign which is that Government designs and implements policies and programmes that enhance the welfare of the poor and protects disadvantaged groups that constitute much of the Nigerian population and address issues of inequality.
‘‘We have followed with keen interest, the trend around the Federal Government’s effort to improve revenue mobilization to fund development in Nigeria. There have been diverse’ views from different interest parties on which measures will be more strategic and sustainable.
‘‘We welcome the VAIDS is an opportunity to increase the tax net, though it has not yielded the optimum result expected. There are still myriads of companies and other taxable entities in Nigeria who are not in the tax net and still not convicted or punished in any way.
‘‘The Platform hopes that the proposed measures can be effectively implemented to solve the revenue deficit in the country rather than an increase in VAT rate which will only exacerbate poverty and hunger on the “ultimate burden-bearer” ‐ the poor and vulnerable.
‘‘We call on the federal government to concentrate more efforts at ensuring proper collection of appropriate tax from multinationals and large corporations which have continued to benefit from undeserved tax incentives and had for years engaged in tax avoidance practices.
‘‘We call on government and relevant institutions to develop strategies to curb the tax avoidance practices of big businesses in the country and pay attention to challenges of illicit financial flow that had continued to undermine the economy,’’ the group added.
They further called on all Nigerians, especially civil society, the media, labour and citizens working in the development sector and public finance management to continue to raise their voices against measures and policies that will further impoverish Nigerians and introduce new dimensions of inequality.